Business Finance FAQs
The questions UK business owners actually ask us about funding. Loans, MCAs, factoring, invoice finance, asset finance, bad-credit options and what speed to expect.
Business finance in the UK has fragmented dramatically in the last decade. Where you once asked your bank manager for an overdraft, there are now roughly 130 active specialist lenders offering at least a dozen different product structures. The trick is knowing which structure suits which problem - and which lender is genuinely open to your sector and profile right now.
These are the questions we are asked most often by UK SMEs, owner-managers and finance directors looking to raise capital. If you need an answer to something not covered here, call us on the number at the bottom of this page.
Loan structures and product choice
What is the difference between a business loan and a merchant cash advance (MCA)?
A business loan is a fixed-sum debt facility repaid in equal monthly instalments at a stated APR over an agreed term, typically 1-7 years. A merchant cash advance is a sale of future card receipts: the funder advances a lump sum and recoups it as a fixed percentage of each card transaction until a pre-agreed multiple of the advance is repaid. MCAs are faster to arrange and require no fixed monthly payment, but the implied APR is significantly higher than a term loan and they only suit businesses with strong, predictable card turnover. For most SMEs, a business loan is meaningfully cheaper if you can wait the extra week to arrange it.
Can I get a business loan with bad credit or a recent CCJ?
Yes. The UK has roughly 25-30 specialist lenders who actively underwrite businesses with light director or company adverse, including satisfied CCJs, historic defaults, late filings, HMRC time-to-pay arrangements and recent restructures. Pricing is higher than the high street but appetite is genuinely there. The key is getting the file in front of the lenders who underwrite this profile rather than wasting time with banks whose policy will decline on sight. Doulton runs the same brief across the right specialist panel to get you indicative terms within 24-48 hours.
How fast can I actually get funded?
Realistic timings: unsecured business loan up to £250k - same day to 5 working days. Merchant cash advance - 24-48 hours. Asset finance - same day for sub-£100k on standard kit, 5-10 days for larger. Invoice finance facility setup - 1-2 weeks. Secured business loan against property - 3-6 weeks for full underwriting and legals, 2-3 weeks for a bridge. Specialist commercial mortgage - 6-12 weeks. The honest answer is that speed is a function of the security package and documentation depth, not lender choice.
Do I need to offer personal guarantees or security?
For unsecured business loans up to roughly £500k, the standard package is a personal guarantee from the controlling directors plus a debenture over the company. The PG is a backstop, not the primary security - lenders price off trading affordability and only fall back on the PG in default. For secured business loans against property, the property charge replaces the PG as the primary security and PGs are often optional or limited. For larger facilities, lenders may also take a charge over specific debtors or assets.
What is the difference between factoring and invoice discounting?
Both are forms of invoice finance that advance a percentage (typically 80-90%) of the value of unpaid customer invoices. The difference is whether your customers know. Factoring is disclosed: the funder manages the sales ledger and collects directly from your customers, who are aware the invoices have been factored. Invoice discounting is undisclosed (confidential): you continue to manage your own credit control and customers pay into a trust account in your name, with no visibility of the funder. Discounting is preferred by larger and more established businesses; factoring is common for smaller SMEs who also want the credit-control function outsourced.
Asset finance specifics
Asset finance vs business loan - which should I use for equipment?
Asset finance is almost always cheaper than an equivalent unsecured business loan when you are buying a single identifiable asset. The lender takes the asset itself as primary security, which collapses the credit risk and the price. A £100k machine on 5-year HP will typically cost meaningfully less in total interest than a £100k unsecured term loan over the same period. Use the loan only when you are buying multiple smaller items, intangible assets, or general working capital that cannot be hypothecated.
Can I finance used equipment, not just new?
Yes, on a wide range of asset types. Used commercial vehicles, HGVs, plant, agricultural kit, manufacturing equipment and marine are all routinely funded by specialist lenders who understand the secondary market and auction values. Used IT, soft assets and very specialist niche kit are harder because the secondary market is thin. Pricing on used kit is slightly higher than new because residual values are less predictable, but the difference is usually small.
What is sale-and-leaseback and when does it make sense?
Sale-and-leaseback releases the capital tied up in equipment you already own outright. The lender buys the asset at an agreed value, you lease it back on a multi-year agreement and continue using it as normal. The cash is then deployed back into the business as working capital, growth investment or debt consolidation. It makes most sense when the business needs liquidity but has assets sitting on the balance sheet doing no work, or when the cost of releasing capital this way is cheaper than the available alternatives (overdraft, MCA, second-tier loan).
Start-ups and young businesses
Can a start-up get a business loan?
Yes, but the options narrow significantly under two years of trading. Realistic routes: Start Up Loans (government-backed, up to £25k per director, unsecured), specialist start-up lenders willing to take a director-PG-backed unsecured facility, asset finance where the equipment itself secures the loan, or any product backed by directors' real estate. Trading history is the single biggest constraint - the volume of available capital roughly doubles at the 12-month mark and doubles again at 24 months.
Is my business too small to use a broker?
No. We arrange facilities from £25k upwards across the SME and lower mid-market. There is no minimum trading size we will not look at, though for sub-£100k facilities the volume of lenders willing to engage individually narrows and many borrowers will end up with one of three or four obvious answers. We will still run the comparison and tell you honestly when the market only really offers one or two competitive options.
Working with Doulton
Do you charge an upfront fee?
Not on facilities over £1m, ever. On smaller facilities, we sometimes charge a modest engagement fee on highly complex cases (typically light-adverse or specialist sectors), which is rebated against the broker fee on completion. We will always be explicit about this upfront in writing before you commit to anything.
Are you regulated?
Doulton Bridging Finance is registered with the FCA and operates under appropriate permissions for the products we arrange. Commercial business lending to limited companies is largely unregulated in the UK; consumer and FCA-regulated lending falls under separate permissions which we hold or operate alongside as appropriate to the specific case.
Will using a broker hurt my chances or my credit?
No. A specialist broker improves outcomes in two ways. First, we frame the case for the lenders most likely to fund it rather than wasting credit footprint on declines. Second, we negotiate price across multiple parallel quotes rather than accepting the first counter-offer. The reputable end of the market values brokered business because the file is already structured and triaged, which is why broker channels often see better pricing than direct.
Have a question we haven't answered?
Call the team or send a one-line brief on what you need. We come back within hours with whether the market is open to it, at what price, and how fast it can complete.